The following appears in the May 20-26, 2011 issue of the Long Island Business News:

The verdict is in from the Washington, D.C. think tank, the Tax Foundation: out of 1,823 counties with populations over 20,000, Nassau ranks No. 1 in median home property taxes, edging out New York’s wealthiest county, Westchester, where median home prices are over 13 percent higher – $562,000 versus $494,000. Sadly, the 10 counties with the highest property taxes are either in New York or neighboring New Jersey and 12 of New York’s 62 counties are in the top 100. This helps explain why people in both states are voting with their feet and seeking job opportunities in the low tax/ high employment southern and southwestern parts of the nation.

These depressing findings make it all the more imperative that Gov. Andrew Cuomo’s property tax-cap legislation be signed into law.

Cuomo’s bill calls for capping increases in annual local property tax levies to no more than 2 percent or the rate of inflation, whichever is less. To push the levy above the cap, two-thirds of local municipal governing bodies would have to vote yea. In school districts, which comprise over 60 percent of the property tax burden outside of New York City, the support of 60 percent of ballot-box voters would be required.

Cuomo’s bill is particularly tough on school districts. The annual school budget vote will be eliminated. Taxpayers would vote, instead, on the proposed tax levy. A 51 percent majority would be required for any tax increase below the cap but 60 percent if it is higher. If the school district voters reject the proposed higher tax twice, there would be no increase; taxes would be frozen at the previous year’s levy.

The cap would force schools to watch every dollar, to implement efficiencies and to streamline bureaucracies. It would also force Albany to come to terms with burdensome and expensive unfunded state mandates. The Taylor Law would have to be reformed to restore leverage in contract negotiations to management. School districts would need the authority to address the mounting costs of health care benefits for retirees. Also, the state would have to address the spiraling costs of pension contributions and seriously consider implementing portable defined contribution retirement plans for future employees. Finally, capping growth at the lower of 2 percent or inflation will quickly slow school spending if we experience inflation in the years ahead.

The Empire Center for New York State Policy, in a newly published analysis, points out that “Cuomo’s proposed cap is modeled after the most successful tax limitation approach tried in other states –Proposition 2 ½ in Massachusetts. Proposition 2 ½, which allows for voter overrides, has restrained the growth of the tax burden without compromising essential public services. Despite the tax limitation, Massachusetts’ schools rank among the best in the nation.”

The good news is the Republican-controlled Senate passed the governor’s property tax cap in January. However, the Democratic Assembly majority, captives of municipal and teacher unions, are characteristically dragging their feet.

To tighten the screws on Democratic assemblymen, the governor and his cabinet members, who are traveling the state promoting the cap, must incite beleaguered taxpayers to command their representatives to give them, not the vested interests, the power to check the growth of taxes.

AN OPEN LETTER TO NEW YORK POWER AUTHORITY TRUSTEES

Street Corner Conservative respectfully requests that the NYPA Board of Trustees review the following issues relating to what appears to be abuse of State FOIL law based on much delayed and recently released FOIL request information:

1)  Showing Love to Long Island entities. In January, 2011—five months after the request, the NYPA Corporate Secretary responded to a August 22, 2010 FOIL requesting among other items, “information and records as to contributions and payments to not-for-profit entities from NYPA or any subsidiary or affiliate including purchase of tickets or sponsorships to events conducted by any such not-for-profit for the period January 1, 2009 through and including July 31, 2010.”

The recipient list certified by the Corporate Secretary included approximately 187 not-for-profit entities with contributions totaling approximately $808,289.  A significant number of recipients were Long Island entities including Mr. Kessel’s hometown Merrick Chamber of Commerce and the neighboring Bellmore Chamber of Commerce.

On April 18, 2011, in response to FOIL requests dated February 20, 2011 and April 3, 2011, the NYPA Corporate Secretary, included a revised list of contributions for the period January 1, 2009-July 31, 2010.

The revised list contained the following contributions not listed on the original list released in January, 2011: 

Research Foundation of SUNY Stony Brook

$500,000

Stony Brook Foundation

50,000

N.Y.S. Energy Research & Development Authority

486,124

 The revised contributions for the period January 1, 2009-July 31, 2010 totaled $1,844,413.  Of the amounts omitted from the prior list, at least half and perhaps 100% went to Long Island recipients.  Why?

• Who is responsible for the omissions?  Was that person ordered by the NYPA CEO or members of his cohort to violate the law and suppress information embarrassing to the NYPA CEO?
• Was any staff memo ordered to omit the contributions?  If so, who gave the order?
• Should the deliberate withholding of information from a FOIL request, a violation of State law, be ignored?
• If there are violations, will proper authorities be notified?
• Were the three omitted contributions totaling $1,036,124 approved by the board?  Were the hundreds of thousands of dollars of other donations approved by the board?
• If not, should they have been approved by the board?
• What was the purpose of the $486,124 contribution to the N.Y.S. Energy Research Development Authority?  Was it a vehicle to fund additional money to Long Island entities favored by the CEO?
• The Long Island Pine Barrens, which honored Mr. Kessel and Governor Paterson at their 2010 gala dinner, received from NYPA $29,850 in contribution/grants.  Because Mr. Kessel was honored, was this an appropriate gift?  Did the board approve this gift?  Was it an appropriate use of public money for NYPA to pay the Pine Barrens entity tens of thousands of dollars for Kessel to appear on public access TV programs unwatched by millions of people and to appear in the Pine Barrens newsletter?  Is such an expenditure of money consistent with NYPA’s marketing plan?
• According to NYPA FOIL released contribution lists covering the period January 1, 2009 to March 31, 2011, NYPA contributions/grants to not-for-profits totaled approximately $2,271,000.  Contributions to Nassau and Suffolk County not-for-profits totaled $663,931 or 29% of total gifts.  If the NYPA grant to NYS Energy Research and Dev. Authority of $486,124 is added to Long Island’s gift list, total contributions for the period would be $1,150,055 or 50.6% of total NYPA gifts.
• Since NYPA’s total portion of electrical power generated on Long Island is less than 5%, what is the possible business justification for NYPA allocating anywhere from 29% to 50% of its not-for-profits contributions to Long Island?  Is it fair for upstate ratepayers to contribute to Long Island not-for-profits favored by the CEO?
• Was the board aware of the amount of contributions to Long Island not-for-profits?  If so, did the board approve these contributions?
• There are numerous dubious contributions that appear to be unrelated to NYPA’s mission (i.e., West Side Cultural Center – $10,000).  Why were these dubious contributions permitted?

2)  Health Insurance. Did Kessel violate State law as set forth in letters from at least two Attorneys General of the State?  The response to the FOIL request released on April 18, 2011 suggests that a former NYPA trustee did receive free health care benefits paid for by NYPA.  According to the Attorney General, it is illegal to give health care benefits to N.Y. Agency board members.  Who authorized the NYPA trustee to receive this illegal benefit?  Has the Inspector General’s office been notified of this violation?

I appreciate your consideration of these serious matters. I understand how unpleasant it must be to spend your time cleaning up the mess left by your soon to be former CEO.

The following appears in the  May 6-12, 2011 issue of the Long Island Business News:

A month ago former Gov. George Pataki hosted a “secret” dinner with his few remaining loyalists to discuss his presidential prospects. To make sure everyone in the political world learned of the gathering, the “secret” was leaked to the New York Post, whose editors had the good sense to treat it merely as a Page 6 gossip piece. The result: not a ripple on the political Richter scale.

On April 22, Pataki’s PR flacks earned their keep by placing a Page 1 story in The Wall Street Journal’s “Greater New York” section titled “Pataki Enters Debate over National Debt.” Pataki announced he is forming yet another advocacy group called No American Debt dedicated to pressuring GOP presidential candidates to tackle the national debt.

Expect No American Debt to have as much impact on the national political conversation as the Paul Revere advocacy group he headed in 2010 – none. As many political wags have noted, the primary purpose for Pataki raising money for these causes is to help defray travel and dining costs and to retain his long-time political consulting firm, Mercury Public Affairs.

When asked why he is devoting his energies to the debt issue, Pataki replied that the national debt “is just a looming disaster forAmerica, for my kids, for the next generation of Americans.” Too bad Pataki did not consider the debt burdens on future taxpayers during his 12 years as New York’s governor.

Here are the facts:

During Pataki’s tenure, the state’s debt almost doubled to over $50 billion. This caused annual debt service payments to be one of the state’s fastest-growing budget expenditures. Debt service payments, which stood at $2.5 billion in fiscal 1994-1995, had climbed to $4.3 billion by 2006 and were projected to be $6.4 billion by 2011. “One reason that state debt … continued to rise under Mr. Pataki,” reported The New York Times, “is that his administration has not followed a common principle of paying for capital improvements – everything from maintaining roads to building college dormitories to buying railroad cars. The rule, followed by most states, is that in times of plenty, government pays cash for capital needs, and relies mostly on borrowing in hard times.”

To make matters worse, only half of the new debt was actually dedicated to capital projects. The rest was used for one-shot “noncapital” assets and to fund state budget deficits. Even during the boom years when the state enjoyed record surpluses, Pataki paid for spending schemes with borrowed money.

Reviewing this Red Sea of debt, a New York Observer editorial remarked: “Mr. Pataki may have gotten himself re-elected twice by ignoring reality and throwing money at voters, but he is bound to leave a legacy as a fiscal dunce, a legacy that will surely supersede his desire to be known as a tax-cutting governor with a case to be made for higher office.”

When the Journal asked Pataki aides to explain New York’s debt explosion between 1995 and 2006, they replied Pataki “kept state debt in line with the rate of inflation.” Wrong! According to the New York State Division of the Budget, inflation during the Pataki era was up only 39 percent. However, state-funded debt, which grew from $28 billion to $51 billion during that period, was actually up a whopping 82 percent – over twice the inflation rate.

Pataki and his hired minions governed by press release and now they are trying to rewrite history via press release. The fact is that by abandoning his professed conservative principles, Pataki did enormous fiscal and economic damage to his state. And all the Orwellian new-speak from his flacks will not change the facts.

The following appears in the April 22-28, 2011 issue of the Long Island Business News:

As a Conservative, I did not have high expectations that the final budget hammered out in Albany by the “three men in the room” (the governor, Assembly speaker and Senate majority leader) would come to terms with the state’s fiscal plight. Because I’ve witnessed so many pols who promised fiscal reform sell taxpayers down the river, I can’t help being cynical.

Take Gov. George Pataki, whom I enthusiastically supported in 1994.

In Pataki’s first term he engineered significant reductions in spending and unprecedented tax cuts. These actions contributed to New York’s economic rebound in the 1990s.

Unfortunately, the will to permanently change Albany’s tax-and-spend mentality dissipated in 1997 as Pataki and his staff concluded betraying Conservatives and the fiscal responsibility entrusted to him in 1994 was OK in order to hold onto power.

This attitude, plus Pataki’s increasingly disengaged, uninterested approach to governing, led to the discarding of his pledges to cut Medicaid spending, to avoid one-shot fiscal gimmicks, to stop back-door borrowing, to impose no new taxes or fees, and so on.

Pataki’s lackadaisical governing style also encouraged the Legislature to thumb its nose at him. The Legislature added billions to his budgets, overrode his vetoes and imposed on New Yorkers the biggest single tax hike in the state’s history. The size of the state budget during his tenure increased 83 percent – 2.12 times the inflation rate – and is a big cause of the fiscal mess the state faces today.

In the Spitzer-Paterson years, the spending spree continued. Expenditures swelled over three times the rate of inflation.

Enter Andrew Cuomo who promised in his new New York agenda to get the state’s fiscal house in order without raising taxes and fees, or issuing long-term debt.

Conservatives were floored when Cuomo unveiled on Feb. 1 a budget that kept his pledges and eliminated a projected $10 billion deficit. But the question skeptical Conservatives throughout the state asked one another was, Will Cuomo blink? Will he surrender to Speaker Sheldon Silver and his tax-happy conference to get a budget passed on time?

To our surprise, Cuomo’s hard-nosed negotiating and his threat to use his immense executive powers to the fullest if there was no budget on April 1 – including a “take it or leave it” one-week budget extender that would include his full-year cuts – prevailed.

The governor’s 2011-2012 budget deal includes real spending cuts of about 2 percent ($3.5 billion); caps on Medicaid and education spending, which were statutorily slated to increase 13 percent, at 4 percent; and no tax or fee increases. Also, by closing six prisons and cutting and consolidating agencies, the govenor will reduce their operating costs by 20 percent.

Cuomo didn’t get everything he wanted. He gave up the $250,000 cap on malpractice suits to Silver and threw Sen. Dean Skelos a bone by restoring $250 million in education funding. Overall, the deal complied with the Ronald Reagan negotiating rule of settling for at least 80 percent of the loaf.

Despite its imperfections, enacting the first flat budget in 15 years in a state as politically “blue” as New York is a remarkable achievement and should be applauded by all Conservatives. Cuomo obviously wants to distinguish himself from typical tax-and-spend Democrats like the governor of Illinois, who increased his state’s income tax by 60 percent to balance his budget.

Since taking office in January, Cuomo has proven he possess excellent political skills. New York Conservatives now hope the governor’s skills to manage the implementation of his fiscal blueprint are just as sharp. There may be hope for the Empire State after all.